If you’ve never hired a live-in nanny, you may struggle with how much you’ll need to pay. A nanny’s duties will vary from home to home, which makes comparisons difficult. Some nannies will do light shopping and housework, others provide childcare alone. Some areas have a higher demand for nannies, meaning higher salaries. Despite these variations, however, there are benchmarks you can use to help you decide on a salary for a live-in nanny.
A survey of more than 1,100 nannies by the International Nanny Association found that nannies in 2009 earned a wide range of salaries. On the low end, less than 10 percent of nannies earn $400 per week or less. On the high end, 4 to 5 percent of nannies earn more than $1,000 per week.
Experience is the major factor in determining nanny pay: Nannies with 2 years or less of experience averaged $400 to $450 per week, while those with more experience averaged $450 to $800.
Several factors may modify a nanny’s pay expectations: 1) the number of hours of childcare provided each week; 2) competition, because the highest nanny salaries are found in major metro markets where demand is highest; 3) the age of the children, since infants and toddlers require more attention and, in a competitive market, may mean extra pay for the nanny; 4) any extra job responsibilities, such as cleaning or running errands; and 5) general economic conditions and the unemployment rate.
In addition to (or in place of) salary, some nannies will want paid benefits. These can include: 1) a contribution toward health insurance coverage; 2) paid time off and paid holidays; 3) compensation for days when the family doesn’t need nanny services (such as family vacations); and 4) compensation for out-of-pocket expenses (such as using the nanny’s car, buying snacks or groceries, and expenses for entertaining the children).
Au Pair Pay
The U.S. State Department coordinates Au Pair visits to the United States for cultural and educational purposes. Generally in this arrangement, families provide room and board and pay a portion of educational expenses for a student. Au Pairs receive a small salary in addition to room and board. For up-to-date requirements see the State Department web page on the Au Pair program (in Resources).
Every so often a public figure gets in trouble for failing to pay social security taxes for household help. Don’t get caught in the same trap. If you’re not sure how to handle taxes for a live-in nanny or Au Pair, consult with an accountant or tax advisor.
The Fair Labor Standards Act provides that nannies must be paid at least the minimum wage. Under federal law, live-in nannies get overtime pay, but not at a time-and-a-half rate. Some states, however, do require time-and-a-half overtime pay for live-in nannies.
Protect yourself and your nanny from misunderstandings due to the highly personal and varying nature of the work. Prepare a statement of understanding or work agreement that spells out the nanny’s salary, benefits and job roles.